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US fraud prosecutors demand Ford Focus, Fiesta documents

Phoebe Wall Howard, Detroit Free Press on

Published in Business News

U.S. Department of Justice criminal fraud investigators have demanded documents related to the transmission used in about 2 million Ford Fiesta and Focus vehicles sold throughout this decade, the Free Press has learned.

The Free Press obtained a subpoena issued in April in Case No. 126 before a District of Columbia grand jury requesting "all documents, communications and electronically stored information" relating to the company's actions involving the DPS6 PowerShift transmission dating to 2010. It asked for material that might show whether the company knew the transmissions were defective and couldn't be fixed or that it lied to federal safety regulators.

Ford spokesman Said Deep declined to say whether the company had received a subpoena.

"Ford routinely cooperates with all federal, state and local regulatory and other authorities and, as has long been a matter of public record, has in particular cooperated with the National Highway Traffic Safety Administration (NHTSA) as to DPS6-related issues beginning in 2014," Deep said in a prepared statement. "Ford has taken a number of actions to enhance transmission performance and the experience of our customers including extending warranties for customers from five years/60,000 miles to seven years/100,000."

Peter Carr, spokesman for the Department of Justice, declined to comment.

What Ford knew

 

The inquiry focuses on the dual-clutch transmissions used in the entry-level, fuel-efficient vehicles, 1.5 million of which remain on the road. A Free Press investigation published in July found, through company documents and insider interviews, that Ford knew the transmissions were defective before putting them on the market and continued using them for years despite thousands of consumer complaints. Our "Out of Gear" investigation also found that Ford tentatively decided in 2011 to abandon the transmission but opted against that expensive change.

Many of the vehicles shudder, sometimes violently, and can shift erratically and lurch unpredictably. The transmissions are designed to default to neutral in some cases when the transmission isn't operating properly. When that happens, drivers lose acceleration wherever they are. Consumers have filed more than 4,300 complaints with federal regulators that include reports of 50 injuries, but both Ford and regulators say the vehicles do not pose an unreasonable risk and the cars have never been recalled for transmission repair.

Ford also has disclosed to federal securities regulators that it faces substantial risk from a class-action lawsuit whose $35 million settlement is under review and in about 13,000 other cases from vehicle owners who opted out of the class action.

In the subpoena obtained by the Free Press, DOJ trial attorney Blake Goebel requested all documents related to the following:

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